Correlation Between Atari SA and Playtika Holding

Can any of the company-specific risk be diversified away by investing in both Atari SA and Playtika Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Atari SA and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atari SA and Playtika Holding Corp, you can compare the effects of market volatilities on Atari SA and Playtika Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Atari SA with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atari SA and Playtika Holding.

Diversification Opportunities for Atari SA and Playtika Holding

0.29

Correlation Coefficient

Atari SA  Playtika Holding

Modest diversification

The 3 months correlation between Atari and Playtika is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Atari SA and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp and Atari SA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Atari SA are associated (or correlated) with Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Atari SA i.e., Atari SA and Playtika Holding go up and down completely randomly.

Pair Corralation between Atari SA and Playtika Holding

Assuming the 90 days horizon Atari SA is expected to generate 4.65 times more return on investment than Playtika Holding. However, Atari SA is 4.65 times more volatile than Playtika Holding Corp. It trades about 0.05 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.18 per unit of risk. If you would invest  12.00  in Atari SA on August 18, 2024 and sell it today you would earn a total of  1.00  from holding Atari SA or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Atari SA  vs.  Playtika Holding Corp

Atari SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atari SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Atari SA reported solid returns over the last few months and may actually be approaching a breakup point.

Playtika Holding Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Playtika Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atari SA and Playtika Holding

The main advantage of trading using opposite Atari SA and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atari SA position performs unexpectedly, Playtika Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Playtika Holding will offset losses from the drop in Playtika Holding's long position.

The idea behind Atari SA and Playtika Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.